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A 67 



UNITED STATES DEPARTMENT OF A GRI CULTURE 
Bureau of Agricultural Economics 

Washington 

C-67 '"ORLD COTTON PROSPECTS February 26, 1 • 



SUMMARY 

The continuation of the upward movement in cotton prices which 
began in December has created more confidence in the textile industry and 
reports from Liverpool and the Continent of Europe indicate increased buying 
and price fixing on the part of the spinners. 

The total visible supply of all cotton on February 13, 1931 was about 
1.8 million bales above the corresponding date a year ago and 2.5 million 
bales above 1929 whereas the visible supply of American cotton was 2.0 million 
bales above last year and 2.1 million bales above the corresponding date 

the year before. 

Exports of raw cotton thus far this season continue to lose ground 
when compared with exports last season, total exports for this season to the 
end of January being about 412,000 bales below the same period last season 
whereas a month earlier they were only 216,000 bales below the corresponding 

period of 1929-30. 

The textile situation as a whole is not far different from what it 
was a month ago. In the United States arid some of the foreign countries, 
however, the sentiment has improved due to the advance in some of the 
speculative commodities. In the United States the sales of standard cotton 
cloth during January were encouraging because of the large increase over 
December and the fact that they were above January, 1930. The increase in 
consumption of domestic cotton in January as camp- red to December on the 
other hand was less than the average increase during previous years. 



C-67 - 2 - 

In Groat Britain tho outlook was somewhat improved with tho ending of tho 
lock-out of tho woavors and the prospects for a scttlomcnt of tho political 
troubles in India. On the Continent the continued unsatisfactory business 
in ycrns and fabrics resulted in further restriction in activity and output 
in both spinning and weaving mills in January, but the latest reports indi- 
cato that tho continued rise in the prices of raw cotton has caused increased 
buying and price fixing by the spinners and that the feeling in the industry 
as a whole is considerably bettor. In China "both the Japanese and tho Chinese 
mills continue to operate at full capacity. The Chinese mills, however, re- 
port slow yarn business and some accumulation of stocks while tho Japanese 
mills continue to be sold out well forward. Although now business at present 
is very quiet it is expected that an improvement in business will take place 
at the beginning of the Chinese now year, February 17. The mills in Japan 
arc still operating under the restriction of output agreement. Yarn produc- 
tion and exports of cloth decreased during January, "but stocks of yarn are 
lew and prices have strengthened. Conditions in tho textile situation in 
general are more favorable for the consumption of American cotton. 

From the latest production and ginning reports it would seem that 'the 
early estimates for the 1930 crop in some of the important foreign countries 
were slightly too high. 

Prices 
Spo t s 

The advance in cotton prices which was under way a month ago still con- 
tinues. From January 16 to February 13 the advance in the Liverpool spot 
market for all imported growths ranged from 0.85 to 2.33 cents per pound. The 
advances during this period in cents per pound for the various growths were 
as follows: Egyptian Sakellaridis ,2.33 ; Egyptian Uppers, 1.32; Indian Sind, 
1.05; Peruvian Tanguis, 0.99; Brazilian, Ceara and Sao Paulo, and American 
middling, 0.89; and Indian Oomra No. 1, 0.85. From this it would seem that 
the price of American relative to foreign growths is more favorable than a 
month ago for the consumption of American cotton. 

American middling spot cotton in the ten designated markets advanced 
from 9.29 cents per pound to 10.14 cents or 0.85 cents from January 16' to 
February 13, which was about the same as the advance in the Liverpool market. 



C-67 -3- 

The average price in these markets for the month of January was 9.37 cents 
compared with 9.16 cents for December :.nd 16.56 cents during January, 1930. 
The aver: ge price received by producers in the United States on January 15 
was 8.6 cents per pound compared with B.7 cents in December and 15.8 cents 
per pound on the 15th of January, 1930. 

Relat i ve price of American and comp et itive cotton l/ 

Prior to the advance of prices of American cotton in the last half 
of January, both Indian and Egyptian Uppers h..d been showing a tendency to 
become higher priced in comparison with American; indexes based on quotations 
for the last Friday before the middle of the month at Bremen show that 
Indian average of Sind, Oomra, Broach, and Punjab rose from 76 per cent of 
American cotton in December to- 81 in January, the highest January figure since 
1928 and the highest relationship of Indian to American since June 1928. 
If this relationship continues for any length of time, it should have some 
influence on the relative amounts of Indian and American cotton consumed 
in 1931, judging from the relationship between relative prices and the 
tendency of consumption in recent years. 

This relationship, however, appears to have become less favorable 
for American in the last half of January as result of the upward turn 
taken by American quotations, and- it is of interest to note that spinner 
buying of Indian was immediately reported improved. This development 
might indicate that the present outlook favors a narrow spread between 
Indian and American staples. It is pointed oat by trade observers that the 
prospects for some improvement of the political situation in India as a 
result of the Round Table Conference in London foreshadow, a relaxation 
of the boycott movement against British cotton goods and a general 
strengthening of confidence in the business outlook in India. Such a 
development, of course, could hardly occur without a favorable effect upon 
the cotton industry nearly everywhere. The rising tendency of prices of 
Indian cotton in relation to American in December and early in January 
appears to have been based partially upon this interpretation of Indian 
developments at a time when the American market was weak. The decrease 
in the visible supply of Indian cotton, however, was probably l t he 
principal factor lending strength to Indian cotton. 

The relative price of Egyptian Uppers at Liverpool in comparison 
with American strict middling l-l/l6 inch at Bremen also increased consider- 
ably in January, to 96 as compared with 93 in December. The index figure 
of 93 for December, however, was the lowest in the past five years, and 
in only one other month in this period, namely August 1929 when it was 94, 
has it been lower than 96. 

Futures 

American futures markets rose faster than the Liverpool market 
from mid-December to mid- January, but in the past month the Liverpool 
market has made up this loss so that the gain from December 15 to February 
13 has been about the same in Liverpool, New York, and New Orleans. 

1.1 Based on report dated February 6, 1931 from Agricultural Attache L. V. 
Steere at Berlin, supplemented by cable of February 16. 



C-67 -4- 

From January 14 to February 13 the rise in futures prices for the active 
months was 1.14 to 1.18 cents 'at Liverpool, 0.77 to 0.94 at Hew Orleans, 
and 0.75 to 0.95 at New York. July \nd October contracts made slightly 
greater advances than did •IvLrch and May contracts. 

Sto cks an d Movements 

World visibl e supply 

The total visible supply on February 13, 1931 was about 9,900,000 
running bales compared with 8,060,000 and 7,444,000 at the corresponding 
dates in 1930 and 1929, according to the Commercial and Financial Chronicle, 
Of this, total on January 13 this year 7,420,000 bales were American :,nd 
2,481,000 were foreign whereas last year 5,372,000 were American and. 
2,708,000 were foreign, and at thisMsime in 1929, 5,276,000 bales were 
American and 2,168,000 bales were foreign. Stocks, of American cotton in 
Liverpool and Manchester at this time were about 87,000 b-.^lee above last 
year, but about 193,000 below 1929. Continental stocks of American cotton 
were about 90,000 bales above 1930 ...nd- 10,000 bales below 1929. American 
afloat for Europe on February 15, 1931 amounting to 200,000 bales was 
162,000 bales below a year earlier. The greatest- increase in the visible 
supply of American continues to be in the United States. ^ort stocks at 
this time are about 1,758,000 bales above last year. 

The smaller visible supply of foreign cotton was due largely to the 
decrease in stocks of Indian cotton at .Bombay. The stocks of Egyptian in 
Alexandria continue well above last year. 

Export s of domestic cotton 

Exports of raw cotton from the United States in. January amounted to 
about 533,000 running bales, or about 196,000 bales below January, 1930, 
according to the Bureau of the Census. Exports to Japan were above last 
year. Exports for the season to the end of January totaled 4,479,000 bales 
or about 412,000 bales below last season. France was the only important 
country for which exports from the United St ,tes for the first half of -che 
season were above the corresponding period in the 1929-30 season. 

Exports of fo reig n cotton 

Exports of raw cotton from India from August 1 to February 12 this 
season were 1,759,000 bales according to the Commercial and Financial 
Chronicle. This was 159,000 bales above last season. The increase over 
last year was due to larger exports to Great Britain and to Japan and China, 
Exports to the Continent were about 128,000 b.„les less than last year. 

Exports from Alexandria for this season to February 11 total 491,000 
bales compared .with 567,000 and 639,000 bales in the corresponding periods 
of the 1929-30 and 1928-29 seasons. Exports to the Continent and India so 
far this season have been above those last season and the season before. 



C-67 -5- 

1 nt o sig ht, port rece i pts, mi 1 1 taking s_j_ _et o. ,_ of Ame r ic an cotton 

Domestic cotton moving into si£ht in January amounted to about 
729,000 "bales according to a report from the New Orleans Cotton Exchange. 
This was 111,000 biles below January, 1930 and was the lowest for the 
month of January since the "'ar. The total movement into sight the first 
six months this season amounted to 12,049,000 bales compared with 
13,065,000 bales last season. This smaller into sight movement is no. 
doubt due partly to the tendency of the owners of cotton to hold for 
better prices and partly to the smaller crop. r ort receipts and stocks 
at ports and interior towns in the United States continue above last year 
while cotton moving overland to mills in the United States and Canada 
during January were the lowest for the month since the War, 

Stoc ks in consuming establishments, etc. 

Total cotton on hand on January 31 in consuming establishments this 
year was 1,613,000 bales' or 212,000 bales above a year earlier. Stocks of 
foreign cotton in these establishments were slightly belcrw last year. Haw 
cotton in public storage -nd at compresses in the United States on 
January 31 which amounted to 7,939,000 bales was an increase of 2,535,000 
bales over last year. This increase in the total stocks was likewise 
due to the increase in domestic cotton, as stocks of foreign cotton make 
up a very small portion of the total and were below a year ago. 

Continental spinner takings 



Continental spinne'r takings of American cotton during the four weeks 
ended January 23 amounted to only 274,000 bales as against 406,000 in the 
same period last year and 454,000 two years ago, according to Agricultural 
Attache Steere. An increase in takings has been expected, and reports for 
the last week of January indicate that this has actually taken place, 
but it still remains to be seen whether the improvement will continue long 
enough to make for any substantial rise over the period of a month. The 
usual seasonal tendency for takings is slightly downward in this part of 
the season. 



Textile Situation 
U nited States 

The increase of mill consumption during January which amounted to 
about 48,000 bvles was less than the averse- increase for the ten years 
1920-21 to 1929-30. The January consumption was 102, 0U0 bales above 
last August whereas during the past ten years January has averaged 125,000 
bales above August. The monthly rate of consumption for the six months 
ended January 31 was 411,000 bales compared with 552,000 bales during 
the same period a year earlier. 



c -67 • ■ -o-. 

The domestic consumption of raw cotton during 1 January am'ounted 
to 454,000 running bales compared with 406,000 bales during December , 
576,000 talcs during January, 1930 and 552,000 during August, 1930, 
according to the Bureau of the Censu3. This increase in January iwr 
December of 48,000 bales compares with an average increase during the 
past ten years of 65,000 hales. The daily rati.- of consumption for 
January was approximately 2,400 bales above the December level and 
4,300 bales above the low average during August. The total consumption 
during the first six months this season was about 2,466,000 baiu-s 
compared with 3,314,000 bale's during the same period last season. 



The weekly average of production, sales and shipments of standard 
cotton cloth during January showed- substantial increases over December 
which resulted in the decrease of 12, Z per cent in stocks on hand and an 
increase of 9.9 per cent in unfilled Orders during the month of January. 
The weekly average of production during January w/,s 50.5 million yards 
compared with 46.8 million yards' during December or an increase of 
3.7 million yards whereas during the three years 1927-28 to 1929-30 the 
increase has averaged Only 0.8 million yards. Shipments during January 
also increased more than the average increase during the past three 
years, the weekly average amounting to 52.6 million yards compared 
with 45.4 million yards during December. This was an increase of 7.2 
million yards whereas the three year average increase amounted to 4.6 
million yards. The ratio of shipments to production in January was 
104.2 per cent whereas in December it was 97.0 per cent and during 
January 1928, -1929, and 1930 averaged 97.6 per cent. Sales of cotton 
cloth during January as Compared with December .showed a very substantial 
increase and were slightly above January last year. It should be 
remembered, however, that the sales during December were unusually low. 
The weekly average in January amounted to 59.8 million yards, 23.3 
million yards above December, 14.0 million yards above November, and 
1.4 million yards above January 1930. The ratio of sales to production 
during January was 118.3 per cent compared with 78.0 per cent during 
December and a 3-year average of 82.7 per cent. 

Great Britai n 

The textile situation in Great Britain has improved some with 
the ending of the lock-out on February 14. The lock-out which took place 
during the week of January 19 and 'involved some- 180,000 to 250,000 
weavers was brought to an end by the manufacturers, and operatives began 
work Monday, February 16 at the same terms as existed before the lock-out. 
The trouble started when the weavers, refused to accept the manufacturers 
plan for operating more looms per weaver. The plan called for the 
operation of about eight looms per weaver, whereas at present the usual 
number is about four looms per weaver. According to the new plan the 
operatives would have received higher wages per person, but the 
objection was made to a reduction in the number cf weavers employed. 



C-67 -7- 

Exports of cotton piece goods in Great Britain in January amounted 
to 155.6 million yards, an increase of 25.4 million yards over December and 
compares with an average increase for the ten years 1920-21 to 1929-30 of 
30.5 million yards. Total exports for the six months ended January amounted 
to 877.1 million yards compared with 1,695.4 million yards during the same 
period a year ago and 1,974.8 million yards during this period in 1928-29. 
This is a. decrease of 48.3 per cent from 1929-30 and 55.6 per cent from 
1928-29. 

Exports of cotton yarn in January amounting to 11.3 million pounds was 
0.3 million pounds below December, 1.9 million pounds below January 1930 
and 2.6 million pounds below the 10-year average for January. During the 
past ten years January has averaged about 0.4 million pounds above December, 
Exports for the first six months this season totaled 64.9 million pounds 
compared with 79.2 million pounds in the same period last season or a 
decrease of 18.1 per cent. 

The low exports of piece goods reflect mostly the falling off in trade 
with the Orient, due to the Indian boycott and the decline in silver, al- 
though the exports to other countries arc also low because of depressions. 
The low exports of cotton yarn reflect the textile conditions in Continental 
Europe mostly. 

Continen tal Europ e 1_/ 

The slight rise in raw cotton prices during January was not reflected 
on the Contimnt in any improvement in sales or in general conditions in the 
industry, but the continued rise has quickened buying and price fixing. The 
position of the cotton textile industry continues very unsatisfactory 
practically everywhere on the Continent. The generally firmer tendency of 
raw material prices, however, appears to have brought a slightly better 
sentiment as to the future outlook. 

New business in cotton yarn and fabrics continued the object of much 
complaint throughout January in all the leading continental cotton textile 
countries, including France. Only the Spanish and the small but well pro- 
tected Hungarian and Yugoslavian centers continued to enjoy anything like 
favorable conditions. Business elsewhere left much to be desired, with 
new bookings consisting only of small purchases for early delivery. The net 
result was a further decline in the volume of unfilled orders on hand in 
most countries, but notably in Central Europe. The idleness of 700,000 
looms. in the Lancashire district, as a result of labor troubles, was ex- 
pected to lead to some pick-up in orders for cloth mills on the Continent, 
especially in Germany, but so far this development has not appeared, 
apparently because of the large stocks of cloth held in Lancashire. Hew 
business being booked by both spinners and weavers in France appears to 
continue a little better than in the other important countries on the 
Continent, but, nevertheless, has been very Quiet. The cloth mills have 
done a little more business at the close of the month. 



l/ Based on report dated February 6, 1931 from Agricultural Attache L. V, 
Steere at Berlin, supplemented oy cable February 16. 



C-67 '-o- 

Continued unsatisfactory business in yarn and fabrics resulted in 
some further restriction in activity' and output in both spinning and 
weaving mills during January for the Continent taken as a whole. Figaros 
recently available indicate that the general level of mill operations in 
Central Europe rose slightly in- December in comparison with November, 
chiefly for seasonal reasons, but subsequent changes have unquestionably 
brought curtailment. Present levels of activity in Western and Southern, 
as well as Central Europe, are much below what can be regarded as normal 
operating activity for the years since the industry has regained more 
stable conditions following the war and inflation. Production is clearly 
below the rate of consumption of cotton textile goods. 

January purchases of raw- cotton by spinners were generally limited 
for the month as a whole, though some activity developed during the first 
part of the month, following the period of holiday inactivity. January 
price fixing was also limited and c.i.f. merchants' import purchases were 
generally confined to occasional bargain sales. End of the month reports, 
however, indicated increased interest for both Indian rnd Egyptian cotton, 
and 'bargain lots of South American growths were also readily taken by 
'continental spinners. Contrary to the usual tendency of buying interest- 
to revive when raw material prices show strength, the slight but general 
rise in raw material quotations during January did not bring out any 
noticeable buying activity in the past month, though it appears to have 
created generally better feeling in the trade and the textile industry. 
Extreme caution in buying has become so ingrained and universal since 1929 
that more evidence of market strength appears necessary to uncover real 
demand. Later reports indicate that the sustained rise in price is now 
resulting in increased buying and price fixing by continental spinners. 

Germany 



The German cotton textile situation remained extremely unsatisfactory 
well into January, with general complaint from spinners and weavers, both 
as to volume of new business being booked and as to prices obtained. Some 
seasonal improvement in cloth sales is now evident but the extent and dura- 
tion of the improvement cannot be foretold. For some time there have been 
complaints that further restrictions in activity are unavoidable unless 
early improvement in the flow of new business materializes. 

Spinner reports for December and January indicate that sales effect- 
ed were generally of small volume and mostly for immediate delivery, with 
practically nothing being sold for more than a couple of weeks ahead. Un- 
filled orders on the books of the spinning mills appear to have undergone 
further reduction, with the competitive situation indicated as so keen 
that prices must be considered unsatisfactory notwithstanding the low 
level of raw material prices. German spinning .mill activity increased 
somewhat from November to December for seasonal reasons, but January is 
believed to have brought a decline. . . 



C-67 -9- 

As a result of the continued unsatisfactory distributor demand 
for cotton mill output, German spinner demand for raw cotton, particu- 
larly American, has been very irregular during January, in spite of the 
revival in cotton prices. A slight pick-up in spinner inquiry developed 
during the first part of January, both for prompt delivery and delivery 
in the first quarter of 1931, but following the middle of the month 
spinner purchases of American cotton slackened off, though Indian 
staples continued in some demand for prompt delivery, and lower quality 
Egyptian appeared to find fairly active interest. Later, spinners 
generally showed somewhat more- interest for prompt and near deliveries 
of all growths, a revival chiefly attributable to the -rising tendency of 
the raw market. At the close of the month quietness again ruled for 
American cotton, although the demand for Egyptian and Indian became somewhat 
more satisfactory, even though turnover was not of any great volume. 
Bremen merchant purchases for import, c.i.f., however, remained very quiet 
throughout the entire month and spot business also showed little activity 
in Bremen during January. 

The steady falling off in activity and earnings in the German cotton 
textile- industry indicated in reports in the past two years has been clear- 
ly confirmed by statistics on the dividend declarations' recently issued 
for 87 German cotton textile concerns for the years 1927, 1928 and 1929. 
As the dividends were actually declared late in the following year, allowance 
should be made for the tendency of operations during this period, which 
means that the dividends declared reflect to a considerable extent condi- 
tions developing subsequent to the dividend year itself. The data for 1929, 
for example, appear to reflect conditions of 1930 more than those of 1929. 
The increase in the mimber of textile concerns- paying no dividends at all 
is striking, particularly among firms engaged entirely in spinning or en- 
tirely in weaving* Plants performing both operations appear to have shown 
considerably more ability to- compete under the severe conditions which have 
developed since 1927. 

Table 1.- Dividends paid by 87 German cotton companies 



Number and 
kind of : 


Average percentage : 
dividend paid 


Companies paying 
. ' no dividend 


companies 


1927 : 1928 : 1929 


1927- : 


1928 : 


1929 




. Fer cent: 'Per cent 


Per cent 


: 3 
: 7 

: 15 : 


Niamteex 


- 


Number 


23 Spinner- 
Weavers 
34 Spinners 
30 Weavers 


: .' 10.4 :•- 5.0 
: • 9.8 : ' 6.00 
: 7.8 : 3.1 


3.2 
: 2.5 . 
: 0.5 


: 9 

20 
27 


14 
27 
28 



The outlook for the textile industry in Germany is also being rendered 
uncertain by the campaigns now underway to bring about a reduction in 
prices and wages throughout the country, as this immediately raises the 
prospect of labor difficulty. Wage reductions have been effected in various 
mills already, and a number of disputes are now in progress, so it is not 
impossible that bothersome labor trouble may develop. 



C-67 _10- 



The Western German Course Cotton Spinner's Association is preparing 
to cooperate closer through price conventions, uniform production re- 
strictions and association premiums for exported goods, similar to those 
in the iron industry. 

C z echo slo vaki a 

The cotton textile' situation in Czechoslovakia also remained very 
unsatisfactory throughout January, according to trade reports. It is 
indicated that incoming orders for the mills are entirely inadequate to 
keep them occupied at an acceptable level. Reports state that activity 
has declined in December and January, after a rise in mill operations from 
84 per cent of single shift capacity in October to 89 per cent in November 
following some seasonal pick-up in orders in the fall. Improvement in 
sales is needed if the downward tendency of mill, operations is to be halted. 

The less favorable reports from the cotton industry in the past 
months appear to be at. least partiall:/ due .to the termination of the 
Cz echo slo vaki an-Hungariaji trade treaty on December 15, 1930. Both spinners 
and weavers claim that business with. Hungary is .exceedingly, difficult to 
do under present conditions. Labor troubles are also beginning to 
threaten the industry. Wage disputes and, negotiations looking to the re- 
duction of wages are reported going on in Czechoslovakia, with prospects 
that difficulties may develop in some centers. The textile associations 
have requested that the Government advance the placing of its orders for 
textile deliveries on state account, in order to assist the industry in 
bridging over the present period of unsatisfactory conditions. 

The difficulties experienced by the industry have also led to revival 
of interest in the setting up of the spinners' price cartel which was 
discontinued last autumn after a short period of operation. It is 
announced that negotiations to 'this end Will be taken up in February, but 
considerable 7 doubt ig expressed as to the likelihoo.d of achieving anything 
tangible. In this connection, it is recalled that the so-called Central 
European Export Convention between Czechoslovakia, .Austria, Italy and 
Hungary, which was once planned, has never been realized. It had been 
expected that this convention would 'succeed in some regulation of export 
prices and particularly the extension of credit for. sales to the Balkan 
countries. ' Failure to come to an agreement is attributed to Italy's 
refusal to enter the convention because of a desire to retain a free hand 
in the development of trade relations with the Balkan countries. 



C-6 7 -11- 



Austria 



Reports from both the spinning and weaving branches of the cotton 
textile industry in Austria continue very pessimistic, though some slight 
improvement in sales to Hungary has been experienced by Austrian mills as 
a result of the Czechoslovakian-Hungarian tariff difficulty. Austria 
seems likely to benefit to some extent as long as the two countries con- 
tinue on a non-treaty basis, though this possibility does not seem to 
give much encouragement to Austrian textile circles, judging from the 
pessimism of current reports. 

Reports on Austrian textile conditions should always be considered 
in the light of the fact that the production capacity of the Austrian 
textile industry has been tending downward in recent years because of 
the surplus of spind&age in relation to the looms within the country and 
because of the luck of up-to-date equipment and management in the cloth 
mills. About a quarter of the looms in place are said to be idle because 
of inability to rrr.ke a profit, although consumptive requirements for 
cloth in Austria far exceed the capacity of the cloth mills, and despite 
tariff protection that should be adequate. The situation is one calling 
for radical changes before the Austrian cotton textile industry can be 
placed on a sound basis. 

The annual spinners report for Austria indicates that 1930 exports 
of cotton yarn were 40 per cent below those of 1929 and total 1930 sales 
of cotton yarn 27 per cent below 1929. Total cloth production in 1930 
was 30 per cent below 1929. The report indicated the probability of further 
restriction of domestic production in 1931. On the other hand, it appears 
that mill stocks of cotton yarn in 1930 averaged about 25 per cent below 
the average for 1929. This fact would doubtless be reflected promptly in 
a revival of spinning and weaving mill activity should consumer and trade 
demand improve in connection with an upward turn in the general business 
situation. 

France 

French cotton spinners and weavers reported rather slack business 
in yarn and fabrics during January, at least when compared with previous 
months. Unfilled orders appeared reduced and mill activity somewhat 
curtailed, with further curtailment in prospect in the immediate future. 
The outlook in France, therefore, is somewhat tinged with pessimism, 
though current conditions are still satisfactory enough in comparison 
with the situation in Central Europe. 

Reports on thfe spinning section for the early part of January 
indicate that the yarn market at Roubaix was very quiet, with s:.les in 
Normandy also unsatisfactory, though the latter region felt some slight 
improvement toward the end of the month. Hill activity was slightly reduced 
in -January in both the North and in Normandy, as well as in some of the 
eastern regions, ~nd will apparently be further reduced during February. 
In Normandy and in the Vosges, the organized stoppage amounts to 8-12 
hours a week and is somewhat more in the North. The stoppage has made 
it possible to do away with some of the second shifts, howevur, and, in 
this way, is tending to prevent unsound accumulation of yarn stocKs. 



C-67 -12- 

New business of the French cloth mills was also very quiet through- 
out January, with some pick-up toward the end of the month as a result 
of a somewhat improved export position based on better reports from 
Algeria and other Africa. Madagascar and Indo-China remained unsatisfactory 
buyers. Generally speaking, the weaving situation in France seems to be 
slightly improved over December as far as new business is concerned, but 
activity was slightly reduced, with the Rouen cloth mills having organized 
a stoppage of 12 hours a week. 

Spinner demand for raw cotton, as well as French trade demand remain- 
ed rather quiet through the month, with some improvement toward the end be- 
cause of the rise in the raw market. Around the middle of the month, it 
was reported that spinners were giving preference to Indian cotton for 
new purchases. Price-fixing toward the end of the month, stimulated by 
slightly rising raw cotton quotations, assumed somewhat larger proportions. 

Italy 

No significant changes have occurred in the Italian cotton mill 
situation during the last month or two, with spinning mill activity about 
unchanged at around 70 per cent of capacity or about 25 per cent below 
levels at the same time in 1929 and 1928, and with weaving mill activity 
about 20 per cent below those years. 

New sales of cotton yarn remain somewhat below the current level of. 
production, but the deficiency is smaller than at the same time last year. 
Yarn stocks are still about 30 per cent above last year and unfilled orders 
on hand in the spinning mills much below levels at the same time in 1930. 
Spinners supplies of raw cotton and contracts on hand are still small and 
merchant and spinner demand for spot and c.i.f., cotton has been rather 
quiet, but the continued improvement in prices is now causing increased 
buying and price fixing. 

The active wage reduction campaign going on in. Italy has also . 
affected the cotton industry, as the wage reduction of 8 per cent as of 
December 1 applied to all Italian industries. 

Belgium 

Belgium spinners and weavers also continue to report unsatisfactory 
conditions in respect to new business and mill activity. Stoppage is 
reported to average 25-50 per cent of capacity. Spinning activity, however, 
is being better sustained than weaving activity as the weaving mills have 
not only suffered from the general economic crisis but have also lost much 
of their export business, notably to South America and the Near East. 

Holland 

The cotton situation in Holland still seems well sustained on the 
whole, but, in-. view of the reduced orders in weaving mills, it appears that 
conditions may grow worse for spinners, and general curtailment may occur. 

The report of the Dutch spinning and weaving mills to the Inter- 
national Federation at Manchester for the fourth quarter of 1930 states 
that the demand experienced in the spinning section proved small, and that 
spinners find it difficult to dispose of their production. A little short- 



C-67 -13- 

time is observed in acme of bhe mills, but most of them are still able to 

sell full or nearly full output, though with difficulties, and cnly at 
price sacrifices. The weaving mills are also in a worse situation than in 
the third quarter of 1930, with export mills finding it very difficult to 
sell their output, and having in many cases reduced production. u nfilled 
orders on h"ind in the weaving mills, for export as well as for the domestic 
market, are reported much smaller than last year. Activity of the cloth mills 
working for the domestic market is reported considerably reduced or about 20 
per cent below normal operation. 

Poland 

Reports on January textile developments in Poland are still lacking, 
but the situation is not thought to have undergone material change since 
December, though probably continuing the less favorable tendency. 

Polish spinners' sales of cotton yarn during December were smaller 
than actual production, and yarn stocks consequently increased again. In 
January sales were about equal to production with stocks unchanged. The 
demand for finished goods has not proved equal to expectations, and the mills 
again reported the accumulation of considerable stocks, especially of winter 
goods which may prove difficult to dispose of during the remainder of the 
season. On the other hand, the wholesale and retail trades are reported to 
have hardly any stocks, which balances, at least to some extent, the increase 
observed at the mills. As the spinners trust practically ceased to exist- 
on December 31, 1930, because of the failure to obtain adherence to the 
agreement by a sufficient number of spindles, the control of production 
exercised by that body has been lost, a fact which may have quite an unfavor- 
able effect upon Polish cotton textile conditions, at least for a ti.ae. It 
is regarded as not unlikely, however, that forced reorganization of the trust 
will be brought about through a policy of over-production and depression of 
the market by the large and financially stronger mills, whose owners are 
indicated to be desirous of bringing the smaller units into the agreement. 

Soviet Russia 

The Russian cotton textile industry showed a large increase in 
activity during the last three months of 1930, with a reported total pro- 
duction of 723,963,000 yards of cotton cloth or about 143 per cent more 
than in the preceding three months, when the output was sharply curtailed 
as a result of raw material shortage. Production during these three months 
(October - December), however, was still below the output of 786,298,000 
yards in the corresponding months last year and the; production of 762,239,000 
yards two years ago. Mill activity appears to be returning to normal, as 
the new crop of cotton is becoming available. Shipments of cotton from 
the producing regions to the cotton mills are now reported fully up to 
plan and even somewhat above the plan since the beginning of the new pro- 
curing campaign. 



C-67 -14- 

China 

Jaxoanese mills in China continue to be sold out well forv/ard and al- 
though new cotton business at present is very quiet and American supplies are 
quite large, importers feel that Japanese mills will be in the market again 
and that the monthly rate of consumption of fully 20,000 bales of American 
cotton will be maintained for this crop year. Chinese mills report slow 
yarn business and some accumulation of stocks according to a cable from Agri- 
cultural Commissioner Nyhus at Shanghai. The mills, however, are still run- 
ning at full capacity with the expectation of an improvement in business at 
the beginning of the Chinese new year, February 17. A consolidated tax on 
cotton yarn which is to be collected at the mills went into effect February 1. 
This tax was to take the place of various internal transit duties which were 
in effect up to that time. The administration of the tax is a source of 
great disturbance. Tne tax on yarns, -below 23 counts at the present rate of 
exchange is about $1.75 per bale of 400 pounds or a little ovor 0.4 cent per 
pound and for counts above 23 is .$2.38 per bale or 0.6 cent per pound. 

Prices of Chinese cotton have continued to advance during the past 
month, largely due to the lower silver exchange and the expectation of a 
shortage in the supplies of Chinese cotton. '21ic price advances in India com- 
bined with the lower silver exchange makes it no longer possible for Indian 
cotton to bo dolivored in China at prices below Chinese cotton and as a re- 
sult some orders for Indian cotton have been canceled and exports for the week 
end id February 12 from India to Jap. .n and China wore loss than 1,0C0 bales 
compared with 63,000 bales during the corresponding week last year. The un- 
procodontodly low exchange has brought about relatively high prices for 
American cotton and without corresponding advances of high count yarns the 
consumption of American cotton may be curtailed. 



10 



Japan 

The Japonoso mills are still operating under the agreement to restrict 
output which calls for a nominal curtailment of about 34 per cent or an actual 
curtailment of about 30 per cent, according to Consul Dickover at Kobu« This 
curtailment has brought about an artificial scarcity of yarns and as a result 
yarn prices are unnaturally high. Independent weavers are complaining and 
there is some importation of cheaper Chinese yarns. These and other factors 
arc expected to result in a change in ■ the actual curtailment to about 25.5 
per cent to become effective April 1, 1931. and a further removal of the re- 
striction effective July 1, 1931. Yarn production in January amounted to about 
80.3 million pounds compared with 84.4 million pounds, in December. Exports 
of cotton cloth during January totaled 124.0 million square yards or about 
4.0 million' yards below December. 

Consumption of American cotton in Japan during the last four months of 
1930 amounted to about 74,000 bales monthly, but several conditions favor a 
monthly consumption of at least 80,000 bales for the balance of the crop year 
ending August 30, 1931. The parity between American and Indian cotton prices 
favors the use of American and therefore the mills will probably use more than 
the usual percentage of American cotton in mixtures for medium count yarns. 
The more profitable prices for medium count yarns than for coarse yarns is 
another factor favoring the consumption of American cotton. The consumption 
of American cotton for the crop year is estimated at about 1,000,000 bales. 
Mills continue to import American cotton on a hand to mouth basis and January 






C-67 -15- 

imports of .American, which totaled about 98,000 bales, wore only slightly 
more than the estimated consumption. Arrivals of Indian cotton have been 
more liberal, but there is a scarcity of both Indian and American spot cotton. 
'Hie visible stocks of American cotton at the end of January totaled about 
124,000 bales compared with 208,000 bales -last year and 260,000 bales at the 
end of January, 1929 and the visible stocks of all cotton arc similarly lov;. 

Productio n, a creage and cro^ condition reports 

United States 

Production - Winnings of domestic cotton prior to January 16, 1931 
amounted to 13,592,000 running bales compared with 14,177,000 to the same date 
in 1930 according to the Bureau of the Census. Ginnings therefore, so far 
this season were 95.9 per cent of the ginnings to the same date last year. 
The estimated production this season of 14,243,000 bales is 96.1 per cent 
of the final estimate for the 1929 crop. The States of Arkansas , Mississippi, 
Oklahoma, and Tennessee showed the greatest decreases in ginnings this year 
as compared with last year. In South Carolina, Georgia, and Alabama, the 
ginnings were considerably above last season. 

Qua! i ty of the cro p - The quality of the 1930 crop is still running con- 
siderably better than the 1929 crop. The percentage of the crop ginned prior 
to January 16 which was un tender able in staple (under 7/8 inch) amounted to 
12.8 compared with 19.3 last season. There was a smaller proportion of cotton 
1-1/8 inches and longer in staple this year than last, about the same percen- 
tage of 7/8 to 29/32, but a considerably larger proportion of 15/16 to l-l/32 
inches. 'The grade of the 1930 crop has also been running better than that of 
the 1929 crop which was largoly due to the more open weather conditions this 
year. 

India 



Cotton production for India for the 1930-31 season is forecast at 
4,047,000 bales of 478 pounds net according to a cable received by the Bureau 
of Agricultural Economics on February 18 from the Indian Department of Statis- 
tics at Calcutta. This is about 98 per cent of the revised estimate at the 
same date last season, and about 92 per cent of the final estimate for last 
year. Acreage planted to cotton this season is now estimated at 23,531,000 
acres, or 94 per cent of the revised estimate of the same date last season 
and 92 per cent of the final acreage estimate. 

'2hc production of cotton in the Provinces of Punjab and Madras, India, 
was estimated on February 11 at 627,000 bales of 478 pounds net and 351,000 
bales, respectively. This is a decrease of 32,000 bales or 5 per cent under 
the final estimate of the crop in Punjab last season and 23,000 bales or 4 
per cent under the estimate at this time last year. Since 1920 the crop in 
Punjab has been about 13 per cent of the total Indian crop with a range of 
from 7 per cent to 16 per cent. 

There is a decrease in Madras of 7 5,000 bales or 18 per cent under the 
final estimate of last season and 76,000 bales loss than the estimate at this 
same date last year. For the past ton years the production in Madras has been 
about 9 per cent of the total crop with a range of from 8 per cent to 10 per 
cent. 



C-67 • -16- 

Egypt . , 

It is estimated that 1,106,000 bales of 478 pounds no- word ginned in 
Egypt up to February 1 according to a cable received from the International 
Institute of Agriculture at Rome. This is a docroaso of 139,000 bales or 11 
per cent from the ginnings to the same date last season and is 213,000 bales 
or 16 per cent below that ginned up to February 1, 1929. The latest estimated 
production for the 1930-31 crop, however , was only 1.6 per cent below the 1929 
production and is slightly above the 1928-29 crop. This would seem to indi- 
cate that the production forecast is too high or a considerable portion of 
the crop is being left in the field because of the low prices. Of the total 
ginnings to February '1 this year 270,000 bales wore of the Sakollaridis vari- 
ety. This is 103,000 bales or 23 par cent loss than the ginnings to tho same 
date last year and 140,000 bales or 34 per cent loss thin ginned by February 
1, two years ago. 



Miscellaneous news 



Cotton pric e investigation 



The joint 2'0 solution S. J. Res. 195 by Senator Sheppard which passed 
the Senate in December, 1930 and. was sent to the House C remittee was approved 
by that committee in the last weok in January. This resolution*, it will be 
remembered, provides for the authorization of the Secretary of Agriculture 
through tho Grain Futures Administration to investigate the cause of the de- 
clines in tho price of cotton In 1926, 1927, 1923, 1929, 1930 and provides 
for an appropriation of $125,000 for tho investigation. 

Nov/ uses propa ganda 

An exhibit illustrating the new uses activities of tho Cotton Textile 
Institute has already traveled more than 5,300 miles throughout Europe and 
on January 31 was on the way to Egypt to bo displayed by the Royal Agricultural 
Society during February, according to tho Cotton Trade Journal, January 31, 
1931. From Egypt tho exhibit will go to Switzerland. In England and Germany 
according to the report organize;: promotional activities have taken place 
following the display of the jxhibit. 

According to the press tho women students of tho University of "Missouri 
have adopted a resolution favoring spring wardrobes, including stockings, of 
cotton. 

E gyptian Government c otton policy 

Egyptian spinners mooting in Cairo recommended that the Egyptian 
Government sell each day a fixed quantity of the cotton which it now holds, 
according to a cable received from P. K. Norris, cotton specialist of tho 
Bureau of Agricultural Economics at Cairo. They further recommend that this 
quantity be sold regardless of price and that tho sales begin at the close 
of tho present season. 












C-67 C01TTEITTS 






1 - Summary 1 - 2 

2 - Prices 2-4 

6 - Stocks end movements 4-5 

4 - Textile situation 5-7 

5 - Europe 7 -13 

6 - China 14 

7 - Japan 14 -15 

8 - Production, acreage and crop condition reports 15 -16 

9 - Miscellaneous news 16 



TA3LSS 



1 - Dividends paid "by 87 German cotton companies 



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HS.f,'IL°f F LOR,DA 



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